To nab tax evaders and reduce black money generation, the income tax department and Goods and Services Tax Network (GSTN) signed an agreement to facilitate exchange of data between the two.
The I-T department will share key financial information, including status of I-T return filings, turnover of business, gross total income, and turnover ratio among others with GSTN, the information technology backbone of the two-year-old indirect tax regime.
Besides, the two sides will decide on the modalities for “automatic”, “spontaneous” and “request based” exchange of data. The principal of I-T (systems) or director general of I-T (systems) will enter into a Memorandum of Understanding (MoU) with GSTN for sharing such information, The MoU shall also include different modalities such as confidentiality, timings, secure preservation, disposal after use, related to the exchange of data, the circular issued by the central board of direct taxes on Tuesday said.
The move will allow the I-T department to verify the information filed by businesses in income tax returns, compared to the annual GST returns.
“While furnishing the information, the specified income tax authority shall form an opinion that sharing of such information is necessary for the purposes of enabling the specified authority in GSTN to perform its functions under the goods and services tax (GST),” the CBDT said.
Rakesh Nangia, managing partner, Nangia & Co, said facilitation of exchange of data between authorities under income-tax and GST was indicative of the government’s intention not to spare taxpayers from escaping tax payable under any of the laws.